Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
(AMENDMENT NO. 2)
Under the Securities Exchange Act of 1934
JACKPOT ENTERPRISES, INC.
-------------------------
(NAME OF ISSUER)
COMMON STOCK
------------
(TITLE OF CLASS OF SECURITIES)
466392107
---------
(CUSIP NUMBER)
Kenneth W. Pavia, Sr.
Bolero Investment Group, L.P.
Ingraham Building
25 S.E. 2nd Avenue, Suite 720
Miami, Florida 33131
(305) 371-5200
--------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
Copy To:
Troy J. Rillo
Kirkpatrick & Lockhart LLP
201 S. Biscayne Boulevard, Suite 2000
Miami, Florida 33131
(305) 539-3355
MAY 18, 1998
------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
<PAGE>
CUSIP No. 466392107 Page 2
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1 NAME OF REPORTING PERSONS
BOLERO INVESTMENT GROUP, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ( )
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
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NUMBER 7 SOLE VOTING POWER
OF
SHARES 265,300 SHARES OF COMMON STOCK
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------------------
8 SHARED VOTING POWER
-0- SHARES OF COMMON STOCK
-------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
265,300 SHARES OF COMMON STOCK
-------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
263,700 SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES ( )
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.0%
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14 TYPE OF REPORTING PERSON
PN
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<PAGE>
CUSIP No. 466392107 Page 3
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1 NAME OF REPORTING PERSONS
KENNETH W. PAVIA, SR.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ( )
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES 465,700 SHARES OF COMMON STOCK
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------------------
8 SHARED VOTING POWER
-0- SHARES OF COMMON STOCK
-------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
465,700 SHARES OF COMMON STOCK
-------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
465,700 SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES ( )
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.3%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
CUSIP No. 466392107 Page 4
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1 NAME OF REPORTING PERSONS
FHI, INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ( )
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEVADA
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NUMBER 7 SOLE VOTING POWER
OF
SHARES 5,300 SHARES OF COMMON STOCK
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------------------
8 SHARED VOTING POWER
-0- SHARES OF COMMON STOCK
-------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
5,300 SHARES OF COMMON STOCK
-------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,300 SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES ( )
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.058%
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14 TYPE OF REPORTING PERSON
CO
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CUSIP No. 466392107 Page 5
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1 NAME OF REPORTING PERSONS
FLORENCE PARTNERS INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ( )
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
SOUTH CAROLINA
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NUMBER 7 SOLE VOTING POWER
OF
SHARES 195,100 SHARES OF COMMON STOCK
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------------------
8 SHARED VOTING POWER
-0- SHARES OF COMMON STOCK
-------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
195,100 SHARES OF COMMON STOCK
-------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
195,100 SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES ( )
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1%
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14 TYPE OF REPORTING PERSON
CO
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<PAGE>
CUSIP No. 466392107 Page 6
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1 NAME OF REPORTING PERSONS
CHARLES POWERS
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ( )
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES 195,100 SHARES OF COMMON STOCK
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------------------
8 SHARED VOTING POWER
-0- SHARES OF COMMON STOCK
-------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
195,100 SHARES OF COMMON STOCK
-------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
195,100 SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES ( )
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
CUSIP No. 466392107 Page 7
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 to Schedule 13D is being filed on behalf of the
undersigned Reporting Persons to amend the Schedule 13D filed January 14, 1998
(the "Schedule 13D"), relating to shares of common stock, par value $0.01 per
share (the "Shares"), of Jackpot Enterprises, Inc., a Nevada corporation (the
"Company"). The principal executive offices of the Company are located at 1110
Palms Airport Drive, Las Vegas, Nevada 89119. Unless otherwise indicated, all
capitalized terms used herein but not defined herein shall have the same
meanings as set forth in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As of the close of business on May 18, 1998, the Reporting Persons
held in the aggregate 465,700 Shares, of which (i) 265,300 were purchased by
Bolero, (ii) 5,300 were purchased by FHI and (iii) 195,100 were purchased by
Florence Partners.
Bolero purchased its Shares for an aggregate purchase price of
$3,105,129.20 (excluding commissions), of which approximately $2,083,077 was
provided from Bolero's working capital and $995,459.70 was provided from
borrowings under standard broker margin arrangements.
FHI purchased its Shares for an aggregate purchase price of $61,490.60
(excluding commissions), which approximately $45,490.60 was provided from FHI's
working capital and approximately $16,000 was provided from borrowings under
standard broker margin arrangements.
Florence Partners purchased its shares for an aggregate purchase price of
$2,262,865.90 (excluding commissions), which $2,234,069.40 was provided from
Florence Partners' working capital and $28,796.50 was provided from borrowings
under standard broker margin arrangements.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 to the Schedule 13D is hereby amended, in pertinent part, as
follows:
On May 20, 1998, Mr. Pavia, on behalf of the Bolero Investment
Group, L.P., delivered a letter to the Company, which letter is filed as Exhibit
2 and is incorporated by reference herein, urging the Board of Directors of the
Company to either substantiate of disavow market rumors that the Company has
received an offer for the purchase of the Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) As of the close of business on May 18, 1998, Bolero directly owned
in the aggregate 265,300 Shares, which represent approximately 3.0% of the
8,856,039 Shares outstanding as of May 4, 1997, as reported in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 (the
"OUTSTANDING SHARES"). Bolero, acting through its sole general partner, Mr.
Pavia, has the sole power to vote or direct the vote, and to dispose or to
direct the disposition of, the Shares which it owns directly.
As of the close of business on May 18, 1998, FHI directly owned in the
aggregate 5,300 shares, which represents approximately 0.060% of the Outstanding
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CUSIP No. 466392107 Page 8
Shares. FHI has the sole power to vote direct to vote, and to dispose or to
direct the disposition of, the Shares it owns directly.
As of the close of business on May 18, 1998, Mr. Pavia did not hold any
Shares directly. As the sole general partner of Bolero, Mr. Pavia may be deemed
to beneficially own the Shares held by Bolero. As the sole executive officer and
shareholder of FHI, Mr. Pavia may be deemed to beneficially own the Shares held
by FHI. As the managing director of Florence Partners, Mr. Pavia may be deemed
to beneficially own the Shares held by Florence Partners.
As of the close of business on May 18, 1998, Mrs. Pavia did not hold any
Shares directly. Mrs. Pavia has no right to vote or dispose of any Shares
held by any of the Reporting Persons and therefore does not beneficially own
any of such Shares.
As of the close of business on May 18, 1998, Florence Partners directly
owned in the aggregate 195,100 Shares, which represents approximately 2.2% of
the Outstanding Shares. Florence Partners has the sole power to vote, direct to
vote and to dispose or to direct the disposition of, the Shares it owns
directly.
As of the close of business on May 18, 1998, Mr. Powers did not hold any
Shares directly. As the sole director, sole executive officer and sole
shareholder of Florence Partners, Mr. Powers may be deemed to beneficially own
the Shares held by Florence Partners. As a limited partner of Bolero, Mr. Powers
has no right to vote or dispose of any Shares held by Bolero and therefore does
not beneficially own any Shares held by Bolero.
By reason of the provisions of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "ACT"), Bolero, FHI, Mr. Pavia, Florence
Partners and Mr. Powers may be deemed to be a "group." By reason of the
provisions of Rule 13d-5 under the Act, any member of the group may be deemed to
own all Shares beneficially owned by Bolero, FHI, Mr. Pavia, Florence Partners
and Mr. Powers. Florence Partners and Mr. Powers do not affirm the existence of
such a group and disclaim beneficial ownership of Shares beneficially owned by
Bolero, FHI and Mr. Pavia. Bolero, FHI and Mr. Pavia also do not affirm the
existence of such a group and disclaim beneficial ownership of Shares
beneficially owned by Florence Partners and Mr. Powers.
Except as set forth in this Item 5(a)-(b), each of the persons named in
this Item 5(a)-(b) disclaims beneficial ownership of any Shares owned
beneficially or of record by any other person named in this Item 5(a)-(b).
(c) In the past sixty days, Bolero purchased 4,700 Shares and sold 1,000
Shares through open market purchases and sales in the following transactions,
all of which were effected on the New York Stock Exchange:
PRICE PER TYPE OF
DATE NO. OF SHARES SHARE* TRANSACTION
April 3, 1998 3,000 12.66 Purchase
May 14, 1998 100 12.875 Purchase
May 14, 1998 400 12.75 Sale
May 15, 1998 600 12.625 Sale
May 18, 1998 1,000 12.50 Purchase
May 18, 1998 500 12.25 Purchase
May 18, 1998 100 12.625 Purchase
* Excluding commissions.
<PAGE>
CUSIP No. 466392107 Page 9
Except as set forth herein, none of the Reporting Persons or Mrs. Pavia
has effected any transaction in the Shares during the past sixty days.
(d) Not applicable.
(e) Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Joint Filing Agreement (incorporated by reference to
Exhibit 1 to Schedule 13D).
Exhibit 2 Letter from Mr. Pavia to the Company dated May 20, 1998.
<PAGE>
CUSIP No. 466392107 Page 10
SIGNATURE
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each certifies that the information set forth in this
statement is true, complete and correct.
Dated: May 21, 1998
Bolero Investment Group, L.P.
By: /s/ Kenneth W. Pavia, Sr.
-------------------------
Name: Kenneth W. Pavia, Sr.
Its: General Partner
/s/ Kenneth W. Pavia, Sr.
-------------------------
Kenneth W. Pavia, Sr.
FHI, Inc.
By: /s/ Kenneth W. Pavia, Sr.
-------------------------
Name: Kenneth W. Pavia, Sr.
Its: President
Florence Partners, Inc.
By: /s/ Charles Powers
------------------
Name: Charles Powers
Its: President
/s/ Charles Powers
---------------------
Charles Powers
<PAGE>
CUSIP No. 466392107 Page 11
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement (incorporated by reference to
Exhibit 1 to Schedule 13D).
Exhibit 2 Letter from Mr. Pavia to the Company dated May 20, 1998.
<PAGE>
CUSIP No. 466392107 Page 12
EXHIBIT 1
JOINT FILING AGREEMENT
(Incorporated by reference to Exhibit 1 to Schedule 13D filed with
the Securities and Exchange Commission on January 14, 1998)
<PAGE>
CUSIP No. 466392107 Page 13
EXHIBIT 2
[Letterhead of Bolero Investment Group, L.P.]
May 20, 1998
Mr. Don Kornstein
CEO
Jackpot Enterprises, Inc.
1110 Palms Airport Drive
Las Vegas, Nevada 89119
Re: Alleged Offer For Jackpot Enterprises, Inc.
Dear Mr. Kornstein:
As general partner of the Bolero Investment Group and beneficial owner of over
five (5%) percent of Jackpot Enterprises Inc.'s (Jackpot) shares, I am writing
to express my concerns regarding the spate of rumors involving the potential
sale of the company. Due to Bolero's stake in the company and our well
established goal of enhancing shareholder value, I have recently been contacted
by a variety of individuals and alleged investors who have notified the
undersigned that there was an offer outstanding for the purchase of Jackpot.
These rumors were very specific in nature and the consensus among these third
parties was that a transaction was imminent. Since the company had not announced
receiving any offer and had not given any indication that management was
actively pursuing this type of transaction to enhance values, I immediately
became concerned that potential third party investors would base their
investment decisions on these rumors and thereby potentially exposing the
company to liability. Based on the magnitude of the alleged transaction as well
as the potential harm of any misinformation, I attempted to contact the
company's outside counsel in order to discuss this matter.
After a week of trading phone calls, I was able to finally speak with Mr. Alan
Annex, Esq., the apparent chief outside counsel of the company. Mr. Annex
expressed surprise about the rumors and stated that this was his first notice of
their existence. I proceeded to express my concerns and requested that the
company address this matter and either substantiate or disavow the sum and
substance of these unverified allegations. Mr. Annex assured me that he would
address this matter immediately. I proceeded to memorialize our conversation by
letter dated May 15, 1998, and sent by facsimile and regular mail. A full four
days later, after not having received any clarification from the company, I
sent, via facsimile and to the attention of Mr. Annex, a newspaper article, in
GAMING TODAY, that chronicled the rumors and specifically identified the
potential buyer.
Shortly thereafter, I received a phone call from an individual who had spoken to
you in regard to the newspaper article. After expressing surprise at the speed
in which this information was being disseminated, you allegedly stated to the
individual that the company would announce a transaction only upon receipt of a
financed offer, with the emphasis apparently on financed. This seemingly
semantic distinction on the materiality of an offer appeared intellectually
dishonest at best, contrived at worst. While not privy to the actual
conversation, if taken at face value, appears to be an attempt to justify a
position that is unsupportable. The culmination of a transaction has
traditionally been contingent upon the receipt of an offer, the acceptance of
<PAGE>
CUSIP No. 466392107 Page 14
same, and the obtainment of the requisite financing. If the statement attributed
to you is indeed correct, it would appear that you would have a potential buyer
commit to expending an inordinate amount of time, fees, and work without even
advising whether the offer is acceptable in form and content. Additionally, you
would preclude the shareholders of the company from forming their own opinion in
regard to the attractiveness of the offer.
In analyzing Jackpot's affirmative duties and whether the company has a duty to
acknowledge or disavow the rumors of an impending sale, it is helpful to explore
the relevant case law. Underlying the adoption of the disclosure requirements of
the securities laws was a legislative philosophy that there cannot be honest
markets without honest publicity. Manipulation and dishonest practices of the
market place thrive upon mystery and secrecy. Disclosure, and not paternalistic
withholding of accurate information, is the policy chosen and expressed by
Congress. In regard to the merger context, the courts have addressed situations
similar to the one confronting Jackpot {BASIC INC. V. LEVINSON, 485 U.S. 224
(1988)}. In BASIC, the Supreme Court held that a company's duty to disclose
information is dependent on the materiality of the information. Materiality has
been defined as the significance the reasonable investor would place on the
withheld or misrepresented information. In the merger context, materiality would
depend on the probability that the transaction will be culminated and its
significance to the issuer of the securities. Beyond the requirements placed by
the foregoing, the New York Stock Exchange has also spoken on the issue of
disclosure. According to the NEW YORK STOCK EXCHANGE LISTED MANUAL, companies
are expected to release quickly to the public any news or information which
might reasonably be expected to materially affect the market for its securities.
Additionally, the manual requires companies, in certain circumstances, to
correct market rumors.
Applying the foregoing tests to the situation confronting the company, it would
appear reasonable to advocate the acknowledgment of an offer or the disavowing
of the rumors. Assuming the company has received an offer with defined terms and
conditions, the company has an affirmative duty to advise the shareholders.
Alternatively, if an offer has not been received, management should immediately
address the unfounded rumors in order to protect its shareholders and potential
investors from relying on same. Silence and qualified responses to direct
questions exacerbate the situation and frustrate the intent of the relevant case
law, the legislative intent, certain administrative rules, and the fiduciary
obligations of directors and management to the company's shareholders.
The purpose of this correspondence is to bring to your attention the level of
interest and activity in regard to the rumors of the imminent sale of the
company. Beyond the effect of these unconfirmed allegations on the company's
shareholders and potential investors, I am concerned that the failure to respond
to these rumors may cause irreparable harm to the company. Failure to act
resolutely and either substantiate the rumors or disavow same could subject the
company to the wrath of disgruntled shareholders and attempts to seek redress in
appropriate forums. Additionally, failure to properly address the matter and
issue veiled noncommittal responses could subject the company and its directors
to potential liability. As beneficial owner of over five percent of Jackpot's
shares, I am deeply concerned with the foregoing scenarios. I would urge the
directors and management to carefully review this matter and adopt a position of
full, timely, and accurate disclosure.
Sincerely,
/s/ Kenneth W. Pavia, G.P.
Kenneth W. Pavia, G.P.
